One of the biggest obstacles small businesses face in trying to grow is a lack of funding. If you don’t have enough capital, you won’t be able to entertain bigger customer orders. Most customers generally place orders on a credit basis, so you will need to put up money from your own pocket in order to fulfil the order. However, due to a lack of funding, many businesses have to turn away customers. Not only does this cause bottlenecks in your business growth, but it also hugely impacts your company’s image.
That is one of the main reasons most small business owners look for alternative methods for funding their businesses. There are many different ways by which you can secure alternate financing to keep your business going. One of the best options is to choose an unsecured loan. Unsecured business loans are offered by commercial banks and credit lending institutions to small business owners.
What Is an Unsecured Loan?
When you go to a bank and ask for a loan, the banker will ask for several important details. First of all, the banker will want to know about your business and profitability. Of course, going concern is a major issue, since no bank would ever give a loan to a company that’s unlikely to last beyond a year. An unsecured loan is one in which you don’t have to give anything as collateral to the lender. However, getting a loan from a bank is not as easy as it looks.
After the bank compiles all the important information regarding your business, it will create an application. The application will be independently viewed by a committee. After the market crash of 2008, most banks don’t offer unsecured loans as readily as they once did. Even if your loan amount is sanctioned, the bank will require valuable property as collateral in case you fail to pay off the loan.
There are many private lending companies that currently offer unsecured loans to aspiring entrepreneurs. Whether you are about to set up a new business or need a loan to fund existing orders, you can approach a private lending company to help you out. Private lending institutions also make the whole application process extremely easy. You don’t need to spend your time filling out lots of applications and then wait for them to review and make a decision.
Many companies offer the option of filling out the forms online. All it takes is five minutes to fill out a pre-approval form. Once that is done, the next step is to provide a few simple documents to the company. The company will then draw up a contract. Once signed, the funds will be transferred to your bank account on the same day. The whole process is extremely easy, and allows business owners to get loans at very competitive interest rates. Having a good credit score certainly helps!